Costomer Contracts = Commitment?
- Thread starter Jamin_Mayer
- Start date
- Location
- Longmont, CO
[ QUOTE ]
...Obviously these clients are compelled to get it done quickly...
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I'm sorry to dissagree with you. When people tell me they can "fully understand" and wait", schedule the work, and then turn around and say they would like to cancel. That's what I've repeatedly tried to explain.
I think you're digging into something that is not there. You're making it out like I'm doing something wrong.
If I were doing something wrong, I wouldn't have the back log I do have (and have had). I'm talking about 5-10% of customers (this winter season) backing out.
***Again, I ask if they have a time line of when they want it done. If they tell me, "It's no hurry. I understand you guys are busy." I'm going to take them for their word that they will stay committed to me.
I literally toldo over 300 people (in 4 business days) of our lead time. I'd say 60% would politely say, "I need someone sooner." Some of those impatient people called back after they discovered they weren't going to get a better time.
...Obviously these clients are compelled to get it done quickly...
[/ QUOTE ]
I'm sorry to dissagree with you. When people tell me they can "fully understand" and wait", schedule the work, and then turn around and say they would like to cancel. That's what I've repeatedly tried to explain.
I think you're digging into something that is not there. You're making it out like I'm doing something wrong.
If I were doing something wrong, I wouldn't have the back log I do have (and have had). I'm talking about 5-10% of customers (this winter season) backing out.
***Again, I ask if they have a time line of when they want it done. If they tell me, "It's no hurry. I understand you guys are busy." I'm going to take them for their word that they will stay committed to me.
I literally toldo over 300 people (in 4 business days) of our lead time. I'd say 60% would politely say, "I need someone sooner." Some of those impatient people called back after they discovered they weren't going to get a better time.
5-10% have backed out? Thats ALOT!
Id say there is a breakdown in communication somewhere.
Im not saying your doing something wrong, but you are proclaiming you are doing everything right. Again, what do you offer that others dont?, besides the waiting period?
I assume these are NEW clients? If so, they have no loyalty, and in the long run you probably dont want clients like that anyway.
Id say there is a breakdown in communication somewhere.
Im not saying your doing something wrong, but you are proclaiming you are doing everything right. Again, what do you offer that others dont?, besides the waiting period?
I assume these are NEW clients? If so, they have no loyalty, and in the long run you probably dont want clients like that anyway.
- Location
- Longmont, CO
I could get into what I offer, It would take half a day to discuss back and forth to do so. Research me and find what I have to offer.
And the topic is being lost and distracted from beneficial learning.
And the topic is being lost and distracted from beneficial learning.
- Location
- Longmont, CO
Cheeres brother
easyphloem
Branched out member
- Location
- Louisville, KY
Jamin, do you require signatures on your contracts? On ours it clearly states a cancellation fee of $__ (nominal sum). It's clear, and out in the open. Losing work that has already been "sold" hurts, trust me, I know.
Happy New Year, bubs.
SZ
Happy New Year, bubs.
SZ
- Location
- Southern RI
Jamin, I find that although they say they will wait, because everyone is booked,if they are first time customers they may only wait so long.
This happened this year to me: gave a qoute on a job (storm damage). told the customer that because of the massive damage area wide that I was prioritizing work by the level of danger that the tree presented.
told them two weeks. 1 week later I get a call from the HO telling me that another company that they called for a qoute came over when they were out for the day and started the job.
I called the other guy and told him the story as I new it and said no problem just buy me a coffee someday..
OH Well!!!!$1500. down the drain.
This happened this year to me: gave a qoute on a job (storm damage). told the customer that because of the massive damage area wide that I was prioritizing work by the level of danger that the tree presented.
told them two weeks. 1 week later I get a call from the HO telling me that another company that they called for a qoute came over when they were out for the day and started the job.
I called the other guy and told him the story as I new it and said no problem just buy me a coffee someday..
OH Well!!!!$1500. down the drain.
- Location
- Melbourne, Victoria, Australia.
Jamin, i think if you're booked that far out you should put your prices up, not gouging, but say 10-15%.
It will lower your conversion rate, but thats OK because you have more customers than you can serve in a timely manner anyway.
By upping your average $ sale, you will increase your margin and be busy enough anyway doing higher value work making more profit.
By not having as long of a waiting time you shouldn't have as many fall through the cracks.
A cancellation policy with a small fee for say 48hs prior to scheduled date will help more as a deterent to cancelling at the last minute and putting holes in your schedule, but wanting to keep someone locked into a long wait period of several weeks or penalize them is maybe a bit harsh.
At the end of the day, the cancelling customers are placing a higher value on "when" the job can be done than on "who" & "how" the job is done while your more patient ones values are the opposite.
It will lower your conversion rate, but thats OK because you have more customers than you can serve in a timely manner anyway.
By upping your average $ sale, you will increase your margin and be busy enough anyway doing higher value work making more profit.
By not having as long of a waiting time you shouldn't have as many fall through the cracks.
A cancellation policy with a small fee for say 48hs prior to scheduled date will help more as a deterent to cancelling at the last minute and putting holes in your schedule, but wanting to keep someone locked into a long wait period of several weeks or penalize them is maybe a bit harsh.
At the end of the day, the cancelling customers are placing a higher value on "when" the job can be done than on "who" & "how" the job is done while your more patient ones values are the opposite.
djm
Participating member
- Location
- Seacoast NH
Jamin
This stuff happens. I think the biggest thing is that you probably didn't want to work for them anyway. The longer i am in business the more i tend to believe that i dont want the jobs that i dont get. Its almost natural selection. The majority of the people that we work for are great consequently.
Most people that start the relationship as a pain in the continue to be a pain in the . Let them drive the competition crazy. At least they just cancelled on you and didn't try to sue for something stupid or didnt pay you.
You have 7-8 weeks of work lined up thats awesome. Now is the time to get top dollar for your work. I do have a cancellation fee in place if they cancel within 48 hours its $450. That usually deters them from telling me that they changed their minds when the trucks pull up-which has happened. Ive never enforced it but its good to know I can. If people cancel i usually just schedule something else in.
Good luck- happy new year!
This stuff happens. I think the biggest thing is that you probably didn't want to work for them anyway. The longer i am in business the more i tend to believe that i dont want the jobs that i dont get. Its almost natural selection. The majority of the people that we work for are great consequently.
Most people that start the relationship as a pain in the continue to be a pain in the . Let them drive the competition crazy. At least they just cancelled on you and didn't try to sue for something stupid or didnt pay you.
You have 7-8 weeks of work lined up thats awesome. Now is the time to get top dollar for your work. I do have a cancellation fee in place if they cancel within 48 hours its $450. That usually deters them from telling me that they changed their minds when the trucks pull up-which has happened. Ive never enforced it but its good to know I can. If people cancel i usually just schedule something else in.
Good luck- happy new year!
ward
Participating member
- Location
- Unincorporated Clackamas, OR
Its true (as Unatool mentions) that Marlinspiker hit the nail on the head: a "mobilization" fee for cancellation. That language captures what the fee covers rather than a "cancellation" fee, which sounds punitive (as Tophopper was quick to point out). Thats so good, I'm going to use that language myself (thanks, Marlinspiker!)
I also wholeheartedly agree with djm who wrote:
"The longer i am in business the more i tend to believe that i dont want the jobs that i dont get. Its almost natural selection. The majority of the people that we work for are great consequently.
Most people that start the relationship as a pain in the continue to be a pain in the . Let them drive the competition crazy. At least they just cancelled on you and didn't try to sue for something stupid or didnt pay you."
Absolutely true! Jammin's case is unique, of course. In a storm damage situation like that, you are going to lose a number of contracts. While you can tighten up your contract with a cancellation policy, don't make it a noose that the customer is wary even of contracting with you.
I also wholeheartedly agree with djm who wrote:
"The longer i am in business the more i tend to believe that i dont want the jobs that i dont get. Its almost natural selection. The majority of the people that we work for are great consequently.
Most people that start the relationship as a pain in the continue to be a pain in the . Let them drive the competition crazy. At least they just cancelled on you and didn't try to sue for something stupid or didnt pay you."
Absolutely true! Jammin's case is unique, of course. In a storm damage situation like that, you are going to lose a number of contracts. While you can tighten up your contract with a cancellation policy, don't make it a noose that the customer is wary even of contracting with you.
- Location
- Chapel Hill, NC
I think it depends on state law. In NC written as well as verbal contracts are legally binding and supported by the court.
Your only source of remedy is through civil court though... usually not worth it.
You may be able to write off a portion as loss though, I don't know.
Your only source of remedy is through civil court though... usually not worth it.
You may be able to write off a portion as loss though, I don't know.
southsoundtree
Been here much more than a while
- Location
- Olympia, WA
You can probably only write off costs associated with a job unpaid. I got screwed on a sub-contracting job, and my bookkeeping indicated that I couldn't deduct what I should have been paid for work completed, only costs involved. Probably the same here.
treehumper
Carpal tunnel level member
- Location
- Ridgefield, NJ
Happy new year Jamin'. Welcome to the wonderful world of storm damage. We've lost clients as well. It is not the norm so don't base your normal practices on it. When you become a national or international corporation with billions in business then have a clause for every outcome. Take a look at the sales contract for a vehicle, it has all that "fine print" because the likelihood of the event occurring is pretty good. For us it's not.
We don't have a cancellation fee or even a written contract other than our estimate. No signature is required, no legal language cluttering it. Do we have issues arise, sure. From time to time something will happen that gives rise to a desire to somehow prevent it. However, after some careful consideration it really doesn't matter. What it does effect is how we qualify clients and whom we do business with. As DJM pointed out a PIA during the sale will likely be a PIA throughout the relationship.
A contract is a "meeting of the minds" or more specifically,"An agreement between two or more competent parties in which an offer is made and accepted, and each party benefits. The agreement can be formal, informal, written, oral or just plain understood." (from the Lectric Law Library).
While we may have a contract it is the enforcing of it that is problematic. During extraordinary events such as storm damage work expect to lose some. The cost of enforcing contracts is usually too great relative to the gains.
We don't have a cancellation fee or even a written contract other than our estimate. No signature is required, no legal language cluttering it. Do we have issues arise, sure. From time to time something will happen that gives rise to a desire to somehow prevent it. However, after some careful consideration it really doesn't matter. What it does effect is how we qualify clients and whom we do business with. As DJM pointed out a PIA during the sale will likely be a PIA throughout the relationship.
A contract is a "meeting of the minds" or more specifically,"An agreement between two or more competent parties in which an offer is made and accepted, and each party benefits. The agreement can be formal, informal, written, oral or just plain understood." (from the Lectric Law Library).
While we may have a contract it is the enforcing of it that is problematic. During extraordinary events such as storm damage work expect to lose some. The cost of enforcing contracts is usually too great relative to the gains.
Daniel
Carpal tunnel level member
- Location
- Suburban Philadelphia (Wayne)
Contract law woll vary state to state..
I believe in PA, you'd have to show that a loss was incurrred.. that is, you'd have to prove the amount of $ that was lost through cancellation..
Also of note in PA, a homeowner who has a neighbor's tree growing over his property, can bill the neighbor (tree's owner) for pruning in the air space over his property.. Heard that at the local ISA conference..
also I believe that you can bill someone for the work done, even without a contract.. You can do a job and if you can show that value was recieved, the homeowner must pay for it, even if they never authorized the work.. neither of which make much sense.
I believe in PA, you'd have to show that a loss was incurrred.. that is, you'd have to prove the amount of $ that was lost through cancellation..
Also of note in PA, a homeowner who has a neighbor's tree growing over his property, can bill the neighbor (tree's owner) for pruning in the air space over his property.. Heard that at the local ISA conference..
also I believe that you can bill someone for the work done, even without a contract.. You can do a job and if you can show that value was recieved, the homeowner must pay for it, even if they never authorized the work.. neither of which make much sense.
treehumper
Carpal tunnel level member
- Location
- Ridgefield, NJ
all of it lies in the evidence of the contract, of which, a written document is only that.
To make any sort of claim against a party to a contract you do need to show not only that losses were incurred but that you mitigated those losses.
To make any sort of claim against a party to a contract you do need to show not only that losses were incurred but that you mitigated those losses.
easyphloem
Branched out member
- Location
- Louisville, KY
I don't understand why you don't need a signature on an agreement to do work. You seem like the kind of person who would require it as a professional standard.
But, even with signatures problems arise. Usually these problems are in the 1%-5% range of all work done, so maybe you are accepting that as a cost of doing business?
SZ
But, even with signatures problems arise. Usually these problems are in the 1%-5% range of all work done, so maybe you are accepting that as a cost of doing business?
SZ
It's a sad fact that the contractor is expected to be honest and have proof of credentials etc. and the customer is expected to bluff and wheel and deal. An expert in this, a used car salesman told me a saying "buyers are liars". Just the way it is.
jim454
Participating member
- Location
- The land of Utopia
[ QUOTE ]
It's a sad fact that the contractor is expected to be honest and have proof of credentials etc. and the customer is expected to bluff and wheel and deal. An expert in this, a used car salesman told me a saying "buyers are liars". Just the way it is.
[/ QUOTE ]
I'd like to see someone do something like Angies list. Gear it towards the contractor rating the customer.
It's a sad fact that the contractor is expected to be honest and have proof of credentials etc. and the customer is expected to bluff and wheel and deal. An expert in this, a used car salesman told me a saying "buyers are liars". Just the way it is.
[/ QUOTE ]
I'd like to see someone do something like Angies list. Gear it towards the contractor rating the customer.
treehumper
Carpal tunnel level member
- Location
- Ridgefield, NJ
[ QUOTE ]
I don't understand why you don't need a signature on an agreement to do work. You seem like the kind of person who would require it as a professional standard.
But, even with signatures problems arise. Usually these problems are in the 1%-5% range of all work done, so maybe you are accepting that as a cost of doing business?
SZ
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In a previous business where we had detailed contracts for everything a client said to me, "I'll sign anything you want me to but, if I want to screw you I can and there won't be much you could do about it." His point being that he would honor our agreement with just a handshake and be bound by that as much as any written contract.
Our business has grown through referral and thus we tend to deal with "warm" contacts. Thus far formal contracts or signatures haven't been an issue though in storm clean ups we see more of what Jamin' is talking about. We do confirmation calls in the morning for the work of the day. This will save us some grief. So yes, we do see it as cost of doing business and, more importantly, a way of weeding out difficult clients who usually translate into low margin clients.
With our commercial clients we have them sign off on proposals to keep things clear.
I don't understand why you don't need a signature on an agreement to do work. You seem like the kind of person who would require it as a professional standard.
But, even with signatures problems arise. Usually these problems are in the 1%-5% range of all work done, so maybe you are accepting that as a cost of doing business?
SZ
[/ QUOTE ]
In a previous business where we had detailed contracts for everything a client said to me, "I'll sign anything you want me to but, if I want to screw you I can and there won't be much you could do about it." His point being that he would honor our agreement with just a handshake and be bound by that as much as any written contract.
Our business has grown through referral and thus we tend to deal with "warm" contacts. Thus far formal contracts or signatures haven't been an issue though in storm clean ups we see more of what Jamin' is talking about. We do confirmation calls in the morning for the work of the day. This will save us some grief. So yes, we do see it as cost of doing business and, more importantly, a way of weeding out difficult clients who usually translate into low margin clients.
With our commercial clients we have them sign off on proposals to keep things clear.
